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Insiders at Vuzix (VUZI) and Tiffany (TIF) Push Back in Wake of ‘Fake News’, Weak Earnings

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The market was sent into a tizzy this week, with the Dow sliding by over 1,100 points during the final two days of the trading week. President Trump was at the center of the swirling market maelstrom, stoking fears that a U.S/China trade war could be looming by revealing plans to slap tariffs on up to $60 billion worth of Chinese goods.

It also wasn’t a great week on the market for three specific companies, Tellurian Inc (NASDAQ:TELL), Tiffany & Co. (NYSE:TIF), and Vuzix Corporation (NASDAQ:VUZI), all of which ended the week lower. However, all three companies were also on the receiving end of votes of confidence from insiders, who grabbed shares at a discount this week. As such cases of insider buying are a great signal that shares may be undervalued, let’s take a look at these transactions and see what’s been happening with these stocks of late.

At Insider Monkey, we track insider trading and hedge fund activity to uncover actionable patterns and profit from them. We track over 600 of the most successful hedge funds ever in our database and identify only their best stock picks. Hedge funds are like many other companies in that they bundle products (in this case, stock picks) together and sell them to customers (investors) as a package deal. That means you get their 73rd-best pick along with their best pick, and who wants to pay exorbitant fees for a fund’s 73rd-best idea when you could instead invest in only their best ideas? Our newest quarterly stock picks were released last month, which investors can gain access to by becoming a subscriber to Insider Monkey’s premium newsletters.

Halfpoint/Shutterstock.com

Halfpoint/Shutterstock.com

Vuzix Corporation (NASDAQ:VUZI)

Who Bought Shares: CFO & EVP Russell Grant

How Many Shares Were Bought: 5,000 @ $6.10 per share

Date of the Transaction(s): March 22

Vuzix Corporation (NASDAQ:VUZI) Addresses Fake News: In a press release issued on Wednesday, a day before the insider purchase, Vuzix shared an update on its business activities. The update was intended to combat misinformation about Vuzix that the company said was making the rounds on social media and in the blogosphere (more on that below).

Among the salient points raised was the fact that Vuzix’s master supply agreement with Toshiba requires that company to place $5 million worth of orders for Vuzix’s custom smart glasses within the first 12 months or lose their exclusive rights to sell them. Toshiba placed its first of such orders earlier this month, which totaled $1.1 million.

Mox Reports Slams Vuzix Corporation (NASDAQ:VUZI), Predicts $0.50 Shares, Delisting: The insider purchase, as well as the Vuzix press release, were both largely in response to a scathing report issued by Mox Reports on March 16. Vuzix shares have fallen by 16% since the release of that report, which accused the company of fraudulent stock promotion ahead of Vuzix’s $30 million direct offering in late-January.

The report claimed that Vuzix’s Blade smart glasses didn’t actually work with Alexa at all (despite later claiming that the addition of Alexa functionality would only take an hour to implement and was a non-issue either way), and that glowing press reports touting Blade’s Alexa features were all spearheaded by a stock promoting fraudster.

Vuzix disputed those claims in its recent press release, stating that Blade glasses do work with Alexa and the Alexa voice assistant, and providing links to several videos from recent tech conferences that demonstrate just that. Vuzix also claims to have shown Blade to thousands of industry professionals and media members, in contrast to Mox Reports’ assertion that only a small, handpicked group of media outlets were given access to the device, which they claim is little more than a non-working prop.

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On the next page we’ll look at two other stocks that had compelling insider buying activity this week.

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